Bull s
JK Holdings
Quarterly Report

November,2019
CONTENTSInternationalP1P2P3P456

No.

JKHD s brief statement of accounts for the First
Quarter of Fiscal Year Ending March 2020
Japan Kenzai exhibited at “Mirai-ichi”
sponsored by HASHIMOTO SOGYO
Prospect of Business Conditions for JulySeptember
Market Outlook Plywood
JK Holdings Draws Mid-Term
Management Plan Breakthrough 21
JKHDʼs Akita Glulam and Miyamori tobecome KEYTEC subsidiary
Application Examples of KEYTECʼs LVL

JKHD’s brief statement of accounts
for the First Quarter ofFiscal Year Ending March 2020
Housing starts were 233,000 units (down 4.7% from a yearago) for the period of the ﬁrst quarter of JKHDʼs consolidated year to date ending March 2020. Housing starts for theowner-occupied, which is our main market, increased largely
by 9.6% to 78,000 units, but those for rental houses dropped
14.9% to 86,000 units. Under these circumstances, our group
has taken various measures, including the organizational
reform of Japan Kenzai Co., Ltd., our core subsidiary, as wellas the launch of the Yamanashi Plywood Plant of Keytec Co.,
Ltd., a manufacturing subsidiary, in the ﬁrst year of our new
medium term management plan under the slogan of “Breakthrough 21”.
As a result, the consolidated business results for the ﬁrst quarter of the ﬁscal year found a growth as 88.981 billion yen inTopics
Japan Kenzai Co., Ltd. exhibited at“Mirai-ichi (Future Market) 2019”

Keiichiro Aoki

President
JK Holdings Co.,Ltd.

the net sales (4.3% increase compared with the same period in
the previous year), but a fall in proﬁts as 0.649 billion yen in
the operating proﬁt (down 46.9%) and 0.569 billion yen in theordinary income (down 52.3%). The current net income forthe quarter reduced 53.0% to 0.289 billion yen.
For the full year, our group aims at sales of 365 billion yen (up1.6% year on year), operating proﬁt of 5 billion yen (up 8.6%),
and ordinary proﬁt of 5 billion yen (up 2%), with a net proﬁt
attributable to the parent company shareholders of 2.6 billion
yen (up 23%).

Japan Kenzai exhibitedat“Mirai-ichi”sponsored
by HASHIMOTO SOGYO

hosted by HASHIMOTO SOGYO Ltd.
at Tokyo Big Sight on August 23 to 24.
Mirai-ichi is an annual fair to propose
environmentally- and energy-conscious
products as well as home remodelingmaterials under the keywords of “Thefuture in 7 areas” such as Eco-Energy,Renovation and Used Home Distribution, Health and Comfort, Safetyand Security, Regional Revitalization,Globalization, and IT Utilization.
Japan Kenzai drew the visitorsʼ attention
by exhibiting its major private brand forwhich was launched for sale in April

2017. They will continue to utilize thebuilding materials named “Bulls” and2017. Japan Kenzai and HASHIMOTO

management knowledge in their busi-its ecological wood brand “J-GREEN”,

SOGYO formed a business alliance innesses mutually.

Bulls International No.56

2Survey

Prospect of Business Condition for
October − December

the year ago results. While the numberof rental houses, which was only 88.6%of the corresponding period of a yearearlier, pushed down the overall ﬁgures,that of owner-occupied houses increased (108.6%). Housing starts of theowner-occupied totaled 28,394 units inJune, the highest level since December
2013 before the previous tax hike.

Prospect of BusinessCondition forOctober-December<Demand Forecast byBuilders and Distributors>
The 3rd quarter (October to December)is the peak season in autumn every
year, but it is going to be right after theconsumption tax increase this year. The
demand forecast for October to December 2019 was recently compiled undera diﬀerent situation from the ordinary
years, showing an index of plus 2.0
points among builders and plus 4.9
points among distributors, which weremuch larger than the results as minus
5.5 points and minus 3.7 points in thesame period of the previous year.

slight impact” of the consumption tax
hike.

<Sales Forecast by Leading
Manufacturers>
Among the sales forecast by leading
manufacturers, the forecasts of declines
exceeded the projections of increases
in all sectors. Three sectors of woodenbuilding materials, ceramics & insulation, and housing equipment in particular found more expectations for areduction. However, nearly 50% of themanufacturers in the wooden building
materials and ceramics & insulation
sectors predicted the same level as lastyear. Expectations for an increase in demand have waned, but the manufacturers do not seem to be concerned about adecrease in demand so seriously.

Demand forecasts for 2019 have been
positive from January to March, April
to June, July to September, and until thesurvey this time. However, the marginof increase in October to December
dropped from plus 5.1 to plus 2.0
among builders, and from plus 9.2 toplus 4.9 among distributors comparedto the survey for July to September. By
region, the index went down in four
regions as Tohoku, Kanto, Hokuriku,and Shikoku.
The number of applications for Flat 35
was as high with over 10,000 in Julyafter falling in May and June. Varioussurveys said we would see “only a

Housing starts from January to June2019 were 449,122 units or 99.8% of<Current Status ofRemodeling Business>
According to the survey, 25% to 75%of the target companies had an increase
in remodeling work compared to theprevious survey. Many enterprises forecast a decline in two regions of Hokkaido and Tohoku, but the number of those
who predicted a growth exceeded thatof a fall in the other regions. Besides,
more companies considered the serious
shortage of workmen would cause lossof sales opportunities.

Demand Forecast by Builders
645.12

2.0

1.0

0

0.3

-2-4 -5.4-6.1-6-10 Oct-Dec
2017-5.7-9.1-8

The forecast survey for October to December 2019 is based on the totaled
data gathered from 3,000 client companies in Japan through interviews
which took place from late-July to mid-August 2019.

-8.1
Apr-Jun2018

Oct-Dec
2018

Apr-Jun2019

Oct-Dec
2019

Point0=business result in April-June,1992

Dealing Volume of Lumber

Demand Forecast by Distributors
1561

9.2

1060

51.90-5-10-15

4.9

1.9-3.7-6.0

57-9.1
Oct-Dec2017

Precut lumber

58-5.5-5.6

Laminated lumber

59

Apr-Jun2018

Oct-Dec
2018

Apr-Jun2019

LVL

56 Oct-Dec

Oct-Dec2019

2017

Solid lumber
Apr-Jun2018

Oct-Dec
2018

Apr-Jun2019

Oct-Dec
2019

Point100=all responses expect increase

Point0=business result in April-June,1992

Sales Forecast by Major Supplying Manufacturers（Oct-Dec 2019）
increaselevel-offdecreaseover15％14 ～ 10％

below10％

below10％10 ～ 14％

over15％

0.0

2.7

23.0

37.8

35.1

1.4

0.0

1.3

1.3

17.5

49.925.0

2.5

2.5

0.0

0.0

24.2

48.3

27.5

0.0

0.0

House Equipments（9firms）

0.0

2.8

22.2

41.7

25.0

8.3

0.0

average

0.3

1.7

21.7

44.4

28.2

3.1

0.6

Plywood（13firms）
Wooden Building Materials（10firms）
Ceramic/Heat Insulation（15firms）

International No.56

Trend
Market Outlookof Plywood<Trend of Japanese Plywood>
Japanese softwood plywood production
was 255,700 cubic meters in August
2019, which was 101.5% of the resultsin the same month of the previous year,
whereas shipments were 251,800 cubic
meters. Demand was ﬁrm, but inventories increased by 4,100 cubic metersfrom the previous monthʼs level to122,000 cubic meters as it has become
harder to secure trucks for delivery
since mid-August.
Demand for Japanese softwood plywood is expected to exceed supply due
to strong orders and low inventories atmanufacturers. In addition to the autumnal demand, what manufacturers
show as delivery dates tend to be laterday by day. Moreover, demand forreconstruction in the typhoon disasterareas shall be added, and it is expectedthat customers will remain waiting forthe supply for the time being. The shift
from imported plywood to Japaneseplywood is estimated to keep going
gradually.

<Trend of Imported Plywood>
Arrivals of imported plywood were203,400 cubic meters in August 2019,
which was 86.3% of the results in thesame month of the previous year. By
country of origin, 63,100 cubic meters
were from Malaysia (71.3% of the yearago results), 77,600 cubic meters werefrom Indonesia (98.7%), and 45,900
cubic meters from China (100.5%).
The shipper side continues to face
severe business conditions with a smallBulls

number of new contracts or orders forplywood to be exported to Japan. In theproducing regions, however, prices oflogs ﬁnally reached their lowest levels.
It is expected to be a turning point forthe market.
The domestic supply and demand forimported plywood is gradually gettingbalanced in Japan. It is expected therecovery of prices starts from the items
in shortage and the prices tend to rise
gradually.

Wholesalers' Prices of Plywood in Tokyo

yen/sheet

Imported Plywood（Structural Use）
Imported Plywood（Concrete Form）
Domestic Plywood［Softwood Plywood for Structural Use(12mm)］
Domestic Plywood［Softwood Plywood for Structural Use(24mm)］

2500

2000

1500

1000

5000Mar 2018

Apr 2019

May 2019

Jun 2019

Jul 2019

Aug 2019

Company

JK Holdings Draws Mid-Term
Management Plan“Breakthrough 21”
The Japanese economy is expected toIn this context, the JKHD Group has

to changes in the business environments

recover gradually over the next few

formulated a new medium-term man-and create a structure capable of cop-years, while the global economy is un-agement plan for the period from ﬁscal

ing with such uncertain environments

certain for the future due to some slow-

2019 to 2021. With a slogan as “Break-while maintaining our policy of growth

down factors. In the housing industry as

through 21”, we will respond promptly

expansion.

well, the market remains active due to
low interest rates on housing loans andBusiness Objectives
Net sales

OperatingproﬁtOrdinary
incomeCurrent net
income forthe yearOrdinary
income rate

2019

3,650

50

4726

1.29%

2020

3,700

5249

28

1.32%

2021

3,750

54

51

30

1.36%

the promotion of energy conservation
through national policies, but structural factors for slowdown, such as thedeclining population and the number ofhouseholds hitting the peak before long,
would become apparent in the numberof housing starts.

3

4Bulls International No.56

CompanyJKHD’s Akita Glulam and Miyamori
to become KEYTEC subsidiary

JK Holdings (President Keiichiro Aoki)
announced to make its consolidated
subsidiaries Akita Gluram (Odate City,Akita Prefecture) and Miyamori (Minami Akita-gun, Akita Prefecture) become a subsidiary of KEYTEC (Tokyo)
in January 2019. The purpose is tostrengthen the business of medium andlarge wooden constructions and promo-tion of wood-based interior and exterior
undertaken by JKHD Group. Also themove is designed to streamline andimprove the eﬃciency of the entire operations by reorganizing the group withKEYTEC as an intermediate operatingholding company.
“The three companies, engaged in woodprocessing and production of items incommon, deal with the same suppliersand customers and have shared information at in-house meetings so far.
They can develop more eﬃcient business through the management of theiroperations by KEYTEC as the parent
entity,” said President Aoki.

Application Examples of KEYTEC’s LVL
KEYTEC (President Koichi Nakanishi), a plywood and LVL manufacturer,
has supplied its product “KEYLAM
Interior” made of Japanese cedar LVL
to Akita Broadcasting Systemʼs newbuilding, which is located in front ofAkita Station completed in May 2019.

The relocation is scheduled for April
2020.
KEYLAM Interior can be used as materials for interior and built-in furnitureby making use of the stripe-patterned
laminated veneer surface as the featureof LVL. With its quasi-incombustible
performance, it has been applied inmany buildings as an item that allows
more ﬂexible construction even inplaces subject to the interior restrictions
under the Building Standard Act.

Location：Akita City, Akita Prefecture
Use：Broadcast Station
Architectural Design： Shimizu CorporationTohoku BranchFirst Class Architecture OfficeConstruction： Shimizu Corporation
Tohoku BranchMaterial： LVL KEYLAM Interior
Photos taken by SS Inc. Tohoku Branch

Wood Land Tower 1-7-22 Shinkiba Koto-ku,Tokyo 136-8405 Japan
Phone +81-3-5534-3800 Fax +81-3-5534-3833
E-mail kouhou@jkhd.co.jp
URL http://www.jkhd.co.jp
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